Sprint Accused of Overcharging Feds Millions for Wiretapping

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Sprint Accused of Overcharging Feds Millions for Wiretapping

Photo: Ariel Zambelich/WIRED

The President Barack Obama administration accused Sprint today of overcharging the government more than $21 million in wiretapping expenses.

Sprint, like all the nation's carriers, must comply with the Communications Assistance in Law Enforcement Act of 1994, which requires telcos to be capable of providing government-ordered wiretapping services. The act also allows carriers to recoup "reasonable expenses" associated with those services.

Sprint, of Overland Park, Kansas, inflated charges approximately 58 percent between 2007 and 2010, according to a lawsuit (.pdf) the administration brought against the carrier today.

"As alleged, Sprint over billed law enforcement agencies for carrying out court-ordered intercepts, causing a significant loss to the government's limited resources,” said San Francisco U.S. Attorney Melinda Haag.

The authorities said the suit, filed in San Francisco federal court, was a result of an investigation by the Justice Department's Inspector General.

"Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance," Sprint spokesman John Taylor said. "The invoices Sprint has submitted to the government fully comply with the law. We have fully cooperated with this investigation and intend to defend this matter vigorously."

The suit said that the wireless carrier breached Federal Communications Commission guidelines of 2006 that prohibited carriers from using intercept charges to recover costs of modifying "equipment, facilities or services" to comply with the Communications Assistance in Law Enforcement Act.

"Despite the FCC’s clear and unambiguous ruling, Sprint knowingly included in its intercept charges the costs of financing modifications to equipment, facilities, and services installed to comply with CALEA," according to the suit. "Because Sprint's invoices for intercept charges did not identify the particular expenses for which it sought reimbursement, federal law enforcement agencies were unable to detect that Sprint was requesting reimbursement of these unallowable costs."

According to records, the number of domestic federal and state wiretaps reported in 2012 increased 24 percent from the year earlier. Overall, a total of 3,395 wiretaps were reported in 2012. Of those, 1,354 were authorized by federal judges, and 2,041 by state judges. The number of federal orders jumped 71 percent. State orders increased 5 percent.